The Beckham Law is an income tax exemption granted to non-residents of Spain on their income earned in Spain. It is named after David Beckham, who was the first to take advantage of it when he moved to play for Real Madrid. Since then, many other non-residents have taken advantage of the law to pay less tax in Spain.
In this blog post, we will explore the details of the law, who is eligible to take advantage of it, and how to make sure you pay the least amount of taxes in Spain as a non-resident in 2023.
What Is The Beckham Law?
The Beckham Law is a Spanish law that grants a discounted, flat-rate tax on income earned in Spain by non-residents. It was launched in 2005 and is formally known as the Special Tax Regime for Non-Residents. The law states that non-residents earning money from sources within Spain are liable to pay a 19% tax on their income.
The discounted rate is a significant cut from the previous rate of 24%, making it a tax break for non-residents. However, in order to qualify for the discounted rate, the individual must meet certain criteria.
Who Is Eligible for The Beckham Law?
The Beckham Law in Spain is open to any non-resident of Spain who meets the criteria below:
- The individual must be a non-resident of Spain and not have been a resident of Spain in the previous 10 years.
- The individual must be a resident of a country that has a tax treaty with Spain.
- The individual must be working in Spain, either as an employee or as a self-employed professional.
- The individual must be able to prove that the majority of their income comes from sources within Spain.
What Are The Benefits of The Beckham Law?
The main benefit of the Beckham Law is that it reduces the amount of taxes that non-residents have to pay on their income earned in Spain. This is a significant advantage, as the previous 24% rate was much higher than the 19% rate.
In addition, the law makes it easier for non-residents to move to Spain and start a business, as they will not have to pay the full 24% tax.
What Is Model 151 in Beckham Law?
Model 151 is a form that must be completed and submitted to the Spanish Tax Agency in order to apply for the Beckham Law. This form is used to declare the taxpayer’s income from sources outside of Spain, and to determine whether the taxpayer is eligible for the special reduced rate of 19%. The form must be submitted in Spanish, so it is important to ensure that you understand the information you are providing. Additionally, all income from any part of the world must be declared in order to be eligible for the Beckham Law.
What are the Requirements to Benefit from the Beckham Law?
The Beckham Law is a Spanish law that enables certain foreign professionals to obtain a Spanish residence visa and citizenship if they meet certain requirements. The Beckham Law, officially known as the Special Law for the Attraction of Talent, was created to encourage foreign professionals to relocate to Spain.
To be eligible for the Spanish residence visa and citizenship via the Beckham Law, applicants must:
- Be a foreign professional with a high level of skill or talent
- Have a work contract or employment offer from a Spanish company
- Have the right qualifications and experience
- Prove sufficient financial resources
- Have a Spanish health insurance plan
- Have a clean criminal record
- Submit the appropriate visa application and supporting documents
The Beckham Law also allows applicants to obtain Spanish residence and citizenship without having to relocate to Spain. This option is only available to certain categories of professionals, such as entrepreneurs, investors, or those who possess specialties that would be beneficial to Spain.
Applicants who meet the above-mentioned requirements can apply for a Spanish residence visa and citizenship within 90 days of their arrival in Spain. In addition, the Spanish government is willing to provide assistance to those who need help in obtaining the necessary documentation.
The Beckham Law is a great opportunity for foreign professionals who wish to relocate to Spain and become citizens. By meeting the requirements, applicants can start a new life in this beautiful country and enjoy the many benefits it has to offer
Conclusion
Ley Beckham, also known as the Special Regime for Workers posted to Spanish Territory under the Law of IRPF, is a special tax regime that can be very advantageous for those who meet the requirements and move to Spain for a job. It can be a powerful tool for attracting qualified workers to Spain and offers better taxation. The disadvantages, such as double taxation and limited deductions, must be taken into consideration.
This special regime can be shown to be more advantageous than the general regime based on the economic and personal circumstances of each individual starting at a gross annual salary of approximately 60,000 € and taking into account only income from work.
A Ley Beckham can offer you significant tax benefits if you’re considering moving to Spain for a job, but it’s important to consult a tax advisor if you are uncertain if it’s the right option.
